The report says the NYSE outage was linked to an employee who left the backup system on.

  • According to Bloomberg, the NYSE crash was caused by an employee at the stock exchange’s data center in Chicago.
  • The employee failed to properly shut down the disaster recovery system, sources said.
  • The crash affected more than 250 companies and caused double-digit price fluctuations in some stocks.

The crash at the New York Stock Exchange (NYSE), which caused price fluctuations for more than 250 firms, was linked to an employee who left the back-up system running, the report says.

The NYSE suspended trading in several stocks Tuesday for 15 minutes after a technical error meant the exchange did not conduct “opening auctions” for the affected stocks, causing shares in some companies to start at unusually high or low prices.

Shares of Morgan Stanley and Wells Fargo fell 13% and 15% respectively at the 9:30 am opening, while Walmart surged 12% in a crash that the NYSE said was a “systemic issue.”

The reason, according to a Bloomberg report, was an employee of the NYSE’s backup center on Cermak Road in Chicago, who was unable to properly shut down the center’s disaster recovery system.

A source familiar with the matter told Bloomberg that the error misled the exchange’s system and skipped the opening auction, treating the open call as a continuation of trading and not setting an opening price.

Sources with direct knowledge said NYSE executives spent hours trying to track down the source of the error until they were sure it wouldn’t happen again. They also attempted to determine if the trades could be “clearly wrong” under market rules and were subsequently cancelled.

The NYSE is currently evaluating how much the disruption will cost and is already filing claims from some of the affected companies in accordance with the exchange’s rules, according to Bloomberg.

“Unfortunately, the NYSE has not taken full responsibility and retail investors will have to go through a lengthy process of correcting orders with no guarantee of a reasonable outcome,” Mayura Hooper, a spokeswoman for Charles Schwab, told Bloomberg as the bank was openly critical of the exchange.

“This further reinforces our fears that sending even more retail orders to exchanges will drastically reduce the quality of the investment experience for America’s retail investors.”

The insider reached out to the NYSE for comment, but a response was received at time of publication.

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